J.C. Penney Stops Accepting Apple Pay

J.C. Penney confirmed that it stopped accepting Apple Pay in connection with an April 13 deadline that required merchants to retire old magnetic stripe functionality. The retailer decided to stop accepting the mobile wallet after a deadline from a third-party credit card brand, which the retailer declined to name, requiring merchants to accept EMV contactless functionality, according to a statement provided by J.C. Penney. There's questions as to whether the department store chain will bring back Apple Pay, as it suggested low customer adoption and the inability to control purchase data for transactions via the mobile wallet.

Total Retail's Take: Consumer adoption of mobile payment solutions such as Apple Pay has been low across the industry, and that has proven to be the case at J.C. Penney as well. Consider that at the end of 2017, just 0.2 percent of all Visa transactions were contactless. That low consumer adoption coupled with J.C. Penney's inability to comply with a deadline requiring merchants to accept EMV contactless functionality were factors in the company's decision to stop accepting Apple Pay. But perhaps the biggest factor in the department store's decision was the inability to own the purchase data of customers using the mobile wallet. As consumer adoption of mobile wallets grows — and indications are it will as more contactless credit cards embedded with NFC technology enter the U.S. market — retailers are going to be confronted with a dilemma: offer mobile wallet solutions such as Apple Pay as more consumers expect it as a payment option, and accept the loss of customer data as a result, or don't accept mobile wallet solutions, but own all customer purchase data? For the time being, J.C. Penney is opting for the latter.